Correlation Between Molson Coors and Clairvest

Can any of the company-specific risk be diversified away by investing in both Molson Coors and Clairvest at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Molson Coors and Clairvest into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Molson Coors Canada and Clairvest Group, you can compare the effects of market volatilities on Molson Coors and Clairvest and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Molson Coors with a short position of Clairvest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molson Coors and Clairvest.

Diversification Opportunities for Molson Coors and Clairvest

0.24

Correlation Coefficient

Molson Coors  Clairvest

Modest diversification

The 3 months correlation between Molson and Clairvest is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Molson Coors Canada and Clairvest Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clairvest Group and Molson Coors is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Molson Coors Canada are associated (or correlated) with Clairvest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clairvest Group has no effect on the direction of Molson Coors i.e., Molson Coors and Clairvest go up and down completely randomly.

Pair Corralation between Molson Coors and Clairvest

Assuming the 90 days trading horizon Molson Coors Canada is expected to generate 1.52 times more return on investment than Clairvest. However, Molson Coors is 1.52 times more volatile than Clairvest Group. It trades about 0.05 of its potential returns per unit of risk. Clairvest Group is currently generating about 0.0 per unit of risk. If you would invest  6,446  in Molson Coors Canada on September 20, 2024 and sell it today you would earn a total of  2,000  from holding Molson Coors Canada or generate 31.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	70.42%
Values	Daily Returns

Molson Coors Canada  vs.  Clairvest Group

Molson Coors Canada

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Molson Coors Canada are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Molson Coors unveiled solid returns over the last few months and may actually be approaching a breakup point.

Clairvest Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Clairvest Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Clairvest is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Molson Coors and Clairvest

The main advantage of trading using opposite Molson Coors and Clairvest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molson Coors position performs unexpectedly, Clairvest can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Clairvest will offset losses from the drop in Clairvest's long position.

The idea behind Molson Coors Canada and Clairvest Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .